Analysts say the promise of a referendum allows Mr Papandreou's government, which has born the brunt of public anger over the austerity measures, to pass responsibility for the country's future to the Greek public.

"The new agreement will be submitted to parliament for approval and then submitted to the judgment of the Greek people," Finance Minister Evangelos Venizelos told the Antenna TV channel.

"The Greek people can, of course, say no but must bear in mind the consequences of that decision."

Opposition parties said the government had only announced the referendum to avoid having to call an early general election.

"The prime minister is trying to buy time," said Costas Gioulekas from the right-of-centre New Democracy party.